The Bangladesh market has been made the dumping ground for Indian coarse rice due to its own trade policy as well as that of the neighbouring country.

Though Bangladesh claimed to be self-sufficient in foodgrains in the late 90s, the country is importing a huge quantity of rice over the years.

India, the major source of rice import, has been providing large export subsidies for rice and availing itself of the opportunity of Bangladesh’s failure to impose quantitative restriction on rice import.

To dump into Bangladesh market, the government of India (from 2001-2003) released stocks from the Food Corporation of India (FCI) to private exporters at a subsidised rate of US$127 per ton while the economic cost was US$253 per ton.

"India’s policy of subsidised rice exports has had some negative effects on Bangladesh," said Dr Uttam Kumar Dev, an expert on Agriculture Economy and research fellow of the Centre for Policy Dialogue (CPD).

"The government should regularly monitor the export-import situation and also regulate trade through flexible tariff rate and L/C (Letter of Credit) margin", he said.

It may be noted that currently there is no restriction on the import and export of rice by the private sector of Bangladesh. Traders are free to import or export rice. Their actions are driven by profit concerns only.

While talking to The Independent, Dr Uttam said that Bangladesh’s rice trade was also affected by subsidised production of rice in exporting countries such as India, Thailand and Vietnam.

These countries provide subsidy on irrigation and other inputs that have negative impact on the relative cost of rice production in Bangladesh and competitiveness of Bangladesh’s rice sector.

"To make the country self-sufficient in rice, Bangladesh should pursue rapid expansion of rural electrification in order to provide cheaper power to farmers." Uttam said. He also suggested providing subsidy for diesel used in irrigation to reduce the production cost.

Per ton production cost of rice in Bangladesh is higher than that of India (by 81 per cent), Thailand (by 62 per cent) and Vietnam mainly due to the high cost of irrigation in Bangladesh, he said, citing some recent assessments.

During July-October this year the country imported over eight lakh metric tons of rice against import of four lakh metric tons of rice during the corresponding period of 2003-04 fiscal year, sources in the Bangladesh Bureau of Statistics said.

After the excessive rain of September, production prospects of Aman rice are lower than those of last year and the country will have to import bulk of rice, market analysts said.

In 2002-03 Bangladesh imported 1.56 million metric tons of rice marking a significant rise in import against its previous year.